March 2009

The Internet Identity Workshop , aka IIW, started as the Identity Gang way back in ’05, and has since grown (thanks more to Kaliya and Phil than to yours truly) to become a fixture event in the calendars of many developers and other folks supportive of development work toward working user-driven identity systems. (These today include…

What’s cool about IIW is that we have a large bunch of individuals and outfits working in converging directions, creating and/or mashing up solutions to problems faced by individuals needing to control and assert their identity information in the digital world. For all the activity going on here, the whole field is still brand new, with lots of work left to be done before it’s ready for Prime Time, which has been going on in any case since the commercial Web was born 1.5 decades ago. More importantly, much effort is made by everybody involved not to foreclose progress or lock out other solutions where development vectors converge or cross. it’s the only thing like it I know.

What also rocks is that progress happens at every single IIW, sometimes a great deal of it. The whole thing is about doing. We have participants, not just attendees.

There is, however, urgency. Making sure we get our usual space at the Computer History Museum in Mountain View depends on getting enough registrants today.

Got these shots of St. Louis and the convergence of the Missouri and Mississippi Rivers while flying to Austin by way of Chicago two Fridays ago. You can see the Gateway Arch, right of center, Busch Stadium, the Edward Jones Dome, the City Museum, and lots of barge traffic on the river.

I actually didn’t see much of St. Louis. My window seat didn’t have well-placed windows, and I couldn’t see downward in any case. But my little Canon Powershot 850 could look for me. So I held it against one of the windows, angled it downward, and shot away, checking from time to time on the back of the camera to see if my shots were accurate. Didn’t do too poorly, considering.

What I want is a small camera like this one that can shoot RAW without taking forever to do it. (As was the case with my old and much missed Nikon Coolpix 5700, which also featured a flip-out viewer, making shots like this much easier.) The PS 850 has no RAW mode, and its processing is rather thick with artifacts. Still, fun to use.

Some do. My long-time favorite magazine is The Sun. I bought one of the first issues Sy Safransky sold on Franklin Street in Chapel Hill, in 1974, and found myself writing regularly for the magazine for several years after that, watching it improve with every issue.

Back near the turn of the 80s, Sy and his staff decided to improve the magazine by getting rid of advertising. They did that by becoming a non-profit; but that was secondary to the main purpose, which was to become an instrument for readers and writers, and not of one for advertisers. In other words, advertising was beside the magazine’s journalistic points. The Sun publishes for readers, and readers pay the magazine for good writing. Not surprisingly, The Sun’s subscribers are highly involved, contributing an abundance of letters, plus my favorite section: Readers Write (on a different topic every month).

My point is that it’s possible to have an excellent journal that lives on subscriptions, which are a value-for-value exachange. In the VRM community we propose another: PayChoice, which I wrote about in my last post. The idea here is for readers (or listeners, or viewers) to pay any amount for anything they like. The price is not under the seller’s control. Nor are other forms of signalling by the customer.

Direct support from readers (or listeners, or viewers) matters more and more for media where advertising contributes less and less. I’ve been thinking about this lately, as I contemplate a world with fewer (or no) newspapers and many fewer magazines.

Both newspapers and magazines have been supported in most cases primarily by advertising and secondarily by subscriptions. When print publications need to cut overhead, it’s the writers who get cut. Sometimes whole sections go away. The Boston Globe killed its Northwest section last week. Far as the Globe is concerned, where we live is now West. And how long will that last?

I pay the same for the Globe every week, but they deliver less and less, because their advertisers are buying less and less space. Yet I don’t read the Globe for the ads. I read it for the writing, the editorial content. Would I pay more, to take up the slack? Or would I look for the Globe to cut overhead other than just editorial? The latter, I would think. Still, either way, I’m a paying customer.

As a paying customer with an interest in seeing the Globe survive, I would like to know what the costs of producing the paper itself are. What are the costs of printing and distributing the paper? And what are the costs just of editorial? Never mind advertising for a minute, and what it buys. Just tell me what it costs to support the editorial staff, and to put the paper up online.

What would I have to pay if there were no advertising?

I’d ask the same of magazines.

Just fact-seeking here.

Where I’m going is toward where The Sun is today. I’d like to help publications survive by subscriptions and other forms of direct payment, rather than by advertising.

I’m not against advertising here. I’m just trying to pull the topics apart so they’re easier to discuss.

Thesis #74 of The Cluetrain Manifesto says, “We are immune to advertising. Just forget it.” We wrote that in 1999, when everybody thought that advertising was going to be THE model for businesses on the Internet. The crash came less than a year later.

Then the next bubble came, and this time everybody thought (surprise!) that advertising was going to be THE model for businesses on the Internet. This time they were right, because Google made it so. In fact, Google makes billions with advertising, not just for itself, but for millions of other sites, including countless blogs. Google does it by making advertising accountable, and by moving the wasteful side of guesswork. They take it off ink, paper, airwaves and billboards, and shift it to server cycles, pixels, rods and cones.

Still, most advertising is still wasted. The difference now is that advertising is accountable while it wastes less costly things. This is fine as far as it goes, which is pretty far, even in the current crash.

Now comes Why Advertising Is Failing On The Internet, by Eric Clemons, Professor of Operations and Information Management at Wharton, writing in TechCrunch, no less. When I read it the thought balloon over my head said “Yess!” and “Amen, brother!” over and over. For example:

Pushing a message at a potential customer when it has not been requested and when the consumer is in the midst of something else on the net, will fail as a major revenue source for most internet sites. This is particularly true when the consumer knows that the sponsor of the ad has paid to have this information, which was verified by no one, thrust at him.

Exactly what we said in Cluetrain, and what most people say when they look for havens from advertising, which they find with TiVo and many ad-free places on the Web.

Clemons follows that with this:

The net will find monetization models and these will be different from the advertising models used by mass media, just as the models used by mass media were different from the monetization models of theater and sporting events before them. Indeed, there has to be some way to create websites that do other than provide free access to content, some of it proprietary, some of it licensed, and some of it stolen, and funded by advertising.

At ProjectVRM we have been working on one, called PayChoice. [Later... changed to EmanciPay.] Since most of you don’t follow links, I’ll drop the first two sections in right here:

Overview

PayChoice is a new business model for media: one by which readers, listeners and viewers can quickly and easily pay for the goods they use — on their own terms, and not just those of suppliers’ arcane systems.

The idea is to build a new marketplace for media — one where supply and demand can relate, converse and transact business on mutually beneficial terms, rather than only on terms provided by thousands of different silo’d systems, each serving to hold the customer captive.

PayChoice is a breed of VRM, or Vendor Relationship Management. VRM is the reciprocal of CRM or Customer Relationship Management. VRM provides customers with tools for engaging with vendors in ways that work for both parties. PayChoice is one of those tools. Or a set of them.

Background

We now live in a media environment where goods previously sold directly or paid for by advertising are freely available and shared widely over the Internet. A number of factors contribute to a business and social conundrum for suppliers of those goods:

Easy copying and sharing makes the goods freely available at growing ease and convenience.

Copying and sharing is so widespread and common that punishment for copyright and other usage violations touches only a small minority of offenders, and has proven to be a losing proposition.

What the marketplace requires are new business and social contracts that ease payment and stigmatize non-payment for media goods. The friction involved in voluntary payment is still high, even on the Web, where one must go through complex forms even to make simple payments. There is no common and easy way either to keep track of what media (free or otherwise) we consume (see Media Logging), to determine what it might be worth, and to pay for it easily and in standard ways — to many different suppliers. (Again, each supplier has its own system for accepting payments.)

PayChoice will create a “buy button”-simple payment system to allow readers, listeners and viewers to pay whatever they like, at their discretion, for whatever media products they use. For too many media the traditional business models — subscriptions, newsstand sales, advertising and underwriting — are not sufficient. (Especially in the current economic environment, which is akin to an earthquake that won’t stop.) Nor do they support full participation and involvement with their users.

PayChoice differs from other payment models (subscriptions, newsstand, tip jars) by allowing the customer to pay any amount they please, when they please, with minimum friction — and with full choice about what they disclose about themselves. PayChoice will also support credit for referrals, requests for service, feedback and other relationship support mechanisms, all at the control of the user. For example, PayChoice can provide quick and easy ways for listeners to pay for public radio broadcasts or podcasts, for readers to pay for otherwise “free” papers or blogs, and paid request for stories or programs to be expressed and aggregated, without requiring the customer to disclose unnecessary private information, to become a “member”. This will scaffold real relationships between buyers and sellers, and for supporting journalists covering what Jake Shapiro calls “microbeats.” It will also give deeper meaning to “membership” in non-profits. (Under the current system, “membership” means putting one’s name on a pitch list for future contributions, and not much more than that.)

Micro-accounting

The idea of “micro-payments” for goods on the Net has been around for a long time, and has recently been revitalized as a potential business model for journalism by an article by Walter Isaacson in Time Magazine. What ProjectVRM suggests instead is something we don’t yet have, but very much need: micro-accounting for actual uses. These including reading, listening and watching.

Most of what we now call “content” is both free for the taking and worth more than $zero. How much more? We need to be able to say.

So, as currently planned, PayChoice would -

Provide a single and easy way that consumers of “content” can become customers of it. In the current system — which isn’t one — every artist, every musical group, every public radio and TV station, has his, her or its own way of taking in contributions from those who appreciate the work. This can be arduous and time-consuming for everybody involved. What PayChoice proposes, however, is not a replacement for existing systems, but a new system that can supplement existing fund-raising systems — one that can soak up much of today’s MLOTT: Money Left On The Table.

Provide ways for individuals to look back through their media usage histories, inform themselves about what they have been enjoying, and to determine how much it is worth to them. The Copyright Arbitration Royalty Panel (CARP), and later the Copyright Royalty Board (CRB), both came up with “rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller” — language that first appeared in the 1995 Digital Performance Royalty Act (DPRA), and tweaked in 1998 by the Digital Millennium Copyright Act (DMCA), under which both the CARP and the CRB operated. The rates they came up with peaked at $.0001 per “performance” (a song or recording), per listener. PayChoice creates the “willing buyer” that the DRPA thought wouldn’t exist.

Stigmatize non-payment for worthwhile media goods. This is where “social” will finally come to be something more than yet another tech buzzmodifier.

All these require micro-accounting, not micro-payments. In fact micro-accounting can inform ordinary payments that can be made in clever new ways that should satisfy everybody with an interest in seeing artists compensated fairly for their work. An individual listener, for example, can say “I want to pay 1¢ for every song I hear on the radio,” and “I’ll send SoundExchange a lump sum of all the pennies wish to pay for songs I hear over the course of a year, along with an accounting of what artists and songs I’ve listened to” — and leave dispersal of those totaled pennies up to the kind of agency that likes, and can be trusted, to do that kind of thing.

Similar systems can also be put in place for readers of newspapers, blogs and other journals.

What’s important is that the control is in the hands of the individual, and that the accounting and dispersal systems work the same way for everybody.

No, we don’t have it yet, but we do plan to put it in the Public Radio Tuner in due time. It will help that well over a million of those tuners have been downloaded so far for iPhones.

Back to Eric Clemons’ piece:

The internet is the most liberating of all mass media developed to date. It is participatory, like swapping stories around a campfire or attending a renaissance fair. It is not meant solely to push content, in one direction, to a captive audience, the way movies or traditional network television did. It provides the greatest array of entertainment and information, on any subject, with any degree of formality, on demand. And it is the best and the most trusted source of commercial product information on cost, selection, availability, and suitability, using community content, professional reviews and peer reviews.

My basic premise is that the internet is not replacing advertising but shattering it, and all the king’s horses, all the king’s men, and all the creative talent of Madison Avenue cannot put it together again.

This is exactly where we were going in Cluetrain. Back then, and still today, people tend to think of the Net as yet another one-way producer-to-consumer “medium” for “delivering messages” along with goods that “consumers” pay for. But the Net was and remains a place that serves demand at least as well as it serves supply. The demand side just hasn’t been fully equipped yet. That’s what the VRM movement (which includes but is not limited to ProjectVRM) is all about providing. When we (and others) succeed, we won’t just be consumers anymore. We’ll be customers in full standing.

Eric Clemons goes on to explain many reasons why advertising is a bubble. I agree with all of them, though I am not as pessimistic about Google, for the main reasons Jeff Jarvis visits in What Would Google Do? The fact remains that Google, more than any other large company operating on the Web, gets the fundamentals of abundance: that you make money because of it rather than with it. They know the vulnerability of advertising as a model, and I expect them to work no less hard disrupting the model than they have at building it out. (Perhaps in their secret labs they are already at work on this. I don’t know. But if they’re smart, which they are, they’re on the case.) Clemons closes with this:

The internet is about freedom, and I suspect that a truly free population will not be held captive and forced to watch ads. We always knew that freedom comes at a price; perhaps the price of internet freedom and the failure of ads will be paying a fair price for the content and the experience and the recommendations that we value.

Among the other tools we need are pricing guns for customers. We haven’t had that since before Industry won the Industrial Revolution. But we’ll get them. PayChoice is one example of them. There will be more. And they’ll work because not paying will be increasingly stigmatized.

Right now, for example, most music is available for free. Never mind that some of us call downloading it “theft” or “piracy”. The other price is 99¢, which millions pay in iTunes and through other online stores. Those two price points are not enough. We need ones we can set on our own.

For years Congress and its regulatory arbitrators (first the Copyright Arbitration Royalty Panel and later the Copyright Royalty Board) have been saying there is no “willing buyer” to match the “willing seller” in the online radio, or streaming, business. That is, Internet radio. So, in the absence of that buyer, these panels have handed the pricing gun to the sellers (the RIAA and its collection agency, SoundExchange), but set the prices first. Last I heard, the royalty rate was set to peak at $.0019 per recording, per listener, in 2010.

If you pay 99¢ per song, you’d have to listen to it, what, 521 times to equal the same rate? If you use iTunes, check and see how many times you listen to any song.

So I’m thinking, hey, I’d be glad to pay a penny a recording for what I hear on the radio. These days you have a huge choice of radio stations on the Net. Most play music. All could carry data about that music. I’d be glad to account for that listening, and pay accordingly. And I’d like right now to set that price at a defaulted penny a song. I’d be glad to aggregate my listen-logging with others, with a pledge or an escrow account containing a sum of money for dispersal to artists at that rate. And see what happens.

In fact, that’s what I want to do with PayChoice after we work out the kinks by providing a supplementary business model for public media. Stay tuned.

Oh, and this topic will be among the many I’ll talk about at lunch tomorrow at the Berkman Center. More here.

We were driving somewhere the other day when the kid asked if he could play around with the iPhone for awhile. Among the podcasts I subscribe to is The Best of YouTube — although, as with most of the too-many podcasts I subscribe to, I hardly ever watch it.

I wasn’t paying much attention to what the kid was doing until I heard the unmistakable sound of a country farmer from piedmont North Carolina. My kid was mostly amazed that this farmer could do with a sling-shot what most people can’t do with a rifle: hit nearly anything, whether it was moving or holding still. I was just trying to guess where this guy was from. The announcer was from somewhere in the region, I figured. Probably Greensboro. But the farmer had to be from somewhere, maybe, south of there.

I had the kid re-play the piece, called “Sling Shot Man” (that’s on Best of YouTube; on YouTube itself the full title starts with “Carolina Camera:”). Turns out the farmer lives “past a one-lane bridge on a dirt road south of Asheboro”. In Greensboro — at least when I went to college there in the ’60s — that town was pronounced, (as by this feature’s announcer), “Ashburra”. Locally it was “Aishburra”. Announcers suppressing their local accents would say “Grainssburra”, with elongated s’s and r’s. Otherwise they’d just say “Grainsbura”.

Which leads me to Bob Oakes, the morning host on WBUR here in Boston. The way he pronounces his surname “aOkes” (with a tiny long a in front) and calls NPR’s early show “Mo-ar-ning Edition” sounds Southern to me. According to his bio at that last link, Bob has been around New England for quite a while. But I’m willing to bet he’s from pretty far south of here. I’ll write to him and ask. (Hi, Bob!)

I haven’t eaten today, and it’s well past noon. I spent much of the last couple hours enjoying a long Skype call with Stephen Lewis, who is currently in Turkey, and whose latest post dilates deliciously on an old Mimas Foods bag — “a relic of a turning point in the economic and social history of Bulgaria and much of Eastern Europe.” Makes me hungry for any of the “Flafel, Humberger, Shaourma, Ships Pataos, All Kind Of, Meats” offered by Mimas. Steve writes, “it is the use of international English that catapulted the fare of Mimas from the improvised and local into the realm of coveted, truly international, fast-food.”

Whatever else you’re doing, tune right now to WERS. If you’re not in Boston, here’s the online stream. The show is All Acapella, and it’s freaking amazing. There is so much outstanding a capella music being made right now, by college students alone. Stevie Wonder’s “As” is playing now, sung by the Stanford University Everyday People. Before that was “Some Kind Of Wonderful” by UMass Amherst Doo Wop Shop. Just great, great music and performances that are flat-out astonishing. Talk about good Web integration: here’s the current playlist…

Just got a survey from OMNI hotels, inquiring about my stay there during SXSW in Austin earlier this week. Here’s what I wrote under “Please provide more details on the missing amenity in your guest room. “:

The wi-fi signal strength went up and down, and most of the time was unusable. Twice I was told that perhaps a “wi-fi bridge” could be given to me, but was told later that they were all loaned out. I was there four days during SXSW and really needed a solid network Internet connection. I asked every day if the problem was being resolved. It never was. On the last day they told me they had “escalated it to the manager.” I also had to join the loyalty program to get free wi-fi. A quibble: the sign-up survey’s question about newspaper preference suggested to me that a newspaper would be delivered outside the room door, which is customary in many hotels. I never saw one.

Another quibble: the desk height was too high. This is standard in most hotels. Still, if you’re going to serve business customers, you should have a desk with a top that’s low enough to type comfortably on.

Otherwise it was a fine hotel. As I said before, I’d recommend it to people who don’t care about Internet service.

Props to Joe Andrieu for pointing out the Cult of Done, for which I am constitutionally disqualified, but wish I were not.

Why? Because I: 1) Bite off more than I can eschew, 2) Keep more balls on the floor than anybody I know, and 3) Plan for my epitaph to read “He was almost finished.”

But I am at home right now, mostly getting things done while regretably missing Free Libre Planet, happening right now at Harvard, and for which I am registered. Just too much to catch up on, and I don’t know when Wes Felter is speaking. Hope it’s tomorrow, by which time I hope to have more done.